Fund system in Turkey and its economic effects (1980-2008)

In this study, the characteristics of the fund system in Turkey between 1980 and 2008 and its economic effects on the country?s economy are analyzed. In this context, after emphasizing the description and scope of the concept of fund, the genuine reasons for the rapid expansion of the funds are explained. In order to clarify the concept of ?fund?, an evaluation and distinction are carried out according to its relation to the budget, its purposes and other criteria (its establishment periods, its legal basis, its affiliated institutions, the quality of its resources and revenues and the characteristics of its auditing).As the insufficient audit of the funds in Turkey prevents to discover in which direction the funds transactions and the funds accounts are processed, the adoption of some measures is required besides the liquidation process implemented as the inclusion of the fund revenues into the budget and the allocations of the expenditures in the related administrative budgets and even only a change in their names.Within the context of the role of funds in Turkish economy and their economic effects, this study includes certain findings about the impact of the funds on the budget, public income, expenditure system, total tax burden, and the labor costs. Within this framework, the size of funds with respect to GNP and GDP, the ratios of fund sources and expenditures to GDP, and the proportion of fund investments within the total public sector investments are demonstrated. After 2000, the turning point in the liquidation of funds, it was observed that the ratio of the budget allocations for the funds taking place in the Public Sector Balance to GNP relatively decreased, which resulted from reducing the funds system. It is also observed that ratios of fund investments to public sector investments and of fund investments to GDP followed a similar path almost zeroing out.Consequently; it is necessary to pay attention to the fact that the funds, which can positively contribute to the economy in case of their appropriate use, should not give indispensable functions to themselves regarding their size and their mission in the economy. In this regard, due to the weaknesses in the current system, it is necessary that either the application of the funds be completely abandoned or their unmeasured, undisciplined and continuous use be prevented.For the proper and efficient functioning of funds system, it is also required to audit the funds by correctly identifying the principles concerning the system, to support it with a well designed budgeting system, to provide a positive reflection on the economy by creating employment opportunities as a result of the use of fund resources for social purposes and for the development of the industry and foreign trade.Keywords1 Budget2 Funds3 Inspections4 Liquidation5 Encouragements